IndusInd Bank Says Fund Raising News 'Speculative', 'Inaccurate'
IndusInd Bank on Friday said news reports iterating a fund raising exercise by the lender "are speculative and factually inaccurate."
In a clarification to the exchanges, the lender said that it will "categorically deny having any such discussions as reported in aforesaid media reports."
Reports on Friday had indicated that the bank was in the midst of raising funds through a qualified institutional placement. The bank is in discussions with merchant bankers, specifically Citi, according to these reports.
Some news reports cited this fund-raising exercise as confidence capital, after IndusInd Bank faced a reputational hit following multiple accounting troubles. In March, the bank's then MD & CEO Sumanth Kathpalia told the market the bank had identified accounting discrepancies in its derivatives portfolio which would result in a financial hit of approximately Rs 2,000 crore.
Later on it was found out that the accounting discrepancies were actually much larger and also covered the microfinance book. It was also discovered that senior members of the bank's management had been made aware of the accounting issues much before it was revealed to the market.
Kathpalia and his deputy Arun Khurana quit the bank in April. The markets regulator subsequently also initiated an insider trading investigation against the two, among others. IndusInd Bank's board also came out in public and stated that it believed a fraud had been perpetrated against the lender. A separate investigation under this fraud angle is currently underway by the Economic Offences Wing of the Mumbai police.
In August, IndusInd Bank appointed Rajiv Anand as its MD & CEO. Anand who previously served as deputy managing director at Axis Bank has embarked on a clean up act at the bank, appointing new people at key positions.
In the quarter ended September 30, IndusInd Bank reported a net loss of Rs 437 crore, and a net interest margin of 3.32%. The lender's total loan book was Rs 3.25 lakh crore at the end of the second quarter, while deposits were Rs 3.89 lakh crore.
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